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Commentary

When Amazon Surpasses Google In Consumer Data

Amazon's dedicated storefront for subscription businesses not only gives companies a new way to reach millions of Amazon customers -- it opens a business model to help the Seattle-based marketplace
understand those consumers traversing its network of sites a bit better.

It also puts Amazon in direct competition to build on its search capabilities, product recommendations, and digital
storefront -- similar to Google Play and Apple's App Store.

The storefront is likely supported by Amazon Cloud Services. There are limited-time deals, and deals just for Prime members. All
deals are divided into categories such as "Try something new," or "Education."

Subscriptions automatically renew until the consumer cancels them and customers are eligible for one free trial
or introductory offer.

Publishers such as The New York Times, The New Yorker, The Wall Street Journal, People, and Consumer Reports are selling subscriptions through the service. It also has
attracted providers such as Disney, Dropbox, Fitstar by Fitbit, and Sling TV.

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On its own, the service does little to advance Amazon's position. The company has been selling digital
content for years. The impact comes from turning the digital content into renewal subscriptions. Eligible are U.S.-based businesses with subscription products such as digital apps, Web sites, or
software with customers who pay a recurring fee.

The majority of consumers now live in what Tom Caporaso, CEO at Claris Commerce, calls a "subscription economy." And in many ways, Amazon is
just filling a void.

And while it's filling a void for consumers, it's also filling a void for the company. A data void.

"The data Amazon collects will hone their strategy for
accusations or build out products and services based on customer likes and dislikes," he said. "Think about Netflix or Amazon Prime. They have the preference data on the things we watch, which tells
them a lot about us."

Original content is another factor. Those subscribers tell Amazon what's interesting to them. It helps Amazon better understand consumers and then potential to build out
product roadmaps. "The data collection piece is a tremendous piece of this," he said. "Especially when it comes to third-party data -- the data they wouldn't have access to in the past. It would be a
black box without consumers coming through these subscription services."

Caporaso said Prime members do not generate a tremendous amount of data on the service, but he has found that most
members go to Amazon first to search for information and products and then to Google if they cannot find what they need. Amazon's new subscription service could become that hub too, for people looking
to subscribe to a variety of services.

For the first year a customer subscribes, the publisher receives 70% of each amount of the transaction. After a subscriber’s first year, the
revenue share increases to 85% of each transaction, per Amazon.

Combine digital books, movie and music services with subscription-based services that renew monthly or annually with its
delivery and logistics businesses, and Amazon becomes a powerhouse just as powerful as Google in terms of understanding the consumer data collected from actions taken by consumers across its network
of sites.

The move supports a growing advertising network -- not just on desktop and mobile devices, but through Echo, Amazon's virtual home hub.

Through Subscribe with Amazon,
businesses will have an option to build custom pages with self-service tools and offer exclusive deals to Prime members. Today the offering is strictly for digital products, but Amazon has the
resources to expand the service to physical subscriptions such as Sephora Play, Birchbox and Fabletics. In fact Cratejoy, a company offering a subscription commerce platform, lists more than 100 monthly subscription services.